Introduction

Founded in the 12th century, the Principality of Muscovy was able to emerge from over 200 years of Mongol domination (13th-15th centuries) and to gradually conquer and absorb surrounding principalities. In the early 17th century, a new ROMANOV Dynasty continued this policy of expansion across Siberia to the Pacific. Under PETER I (ruled 1682-1725), hegemony was extended to the Baltic Sea and the country was renamed the Russian Empire. During the 19th century, more territorial acquisitions were made in Europe and Asia. Defeat in the Russo-Japanese War of 1904-05 contributed to the Revolution of 1905, which resulted in the formation of a parliament and other reforms. Repeated devastating defeats of the Russian army in World War I led to widespread rioting in the major cities of the Russian Empire and to the overthrow in 1917 of the imperial household. The communists under Vladimir LENIN seized power soon after and formed the USSR. The brutal rule of Iosif STALIN (1928-53) strengthened communist rule and Russian dominance of the Soviet Union at a cost of tens of millions of lives. After defeating Germany in World War II as part of an alliance with the US (1939-1945), the USSR expanded its territory and influence in Eastern Europe and emerged as a global power. The USSR was the principal adversary of the US during the Cold War (1947-1991). The Soviet economy and society stagnated in the decades following Stalin’s rule, until General Secretary Mikhail GORBACHEV (1985-91) introduced glasnost (openness) and perestroika (restructuring) in an attempt to modernize communism, but his initiatives inadvertently released forces that by December 1991 splintered the USSR into Russia and 14 other independent republics.

Following economic and political turmoil during President Boris YELTSIN's term (1991-99), Russia shifted toward a centralized authoritarian state under the leadership of President Vladimir PUTIN (2000-2008, 2012-present) in which the regime seeks to legitimize its rule through managed elections, populist appeals, a foreign policy focused on enhancing the country's geopolitical influence, and commodity-based economic growth. Russia faces a largely subdued rebel movement in Chechnya and some other surrounding regions, although violence still occurs throughout the North Caucasus

Indicateurs macroéconomiques

The sharp fall in global oil prices has resulted in a prolonged recession. Reduced export earnings are cutting imports and investment and severely limiting fiscal policy. The depreciation of the ruble has raised prices, squeezed real incomes, especially of the poorest, and reduced private consumption. Unemployment will continue to rise. Growth is projected to turn positive in 2017 as falling inflation and rising real incomes strengthen domestic demand. The recovery will nevertheless be slow, amid a lack of structural reforms and uncertain prospects for oil prices.

Given the large drop in real incomes, it is important to prioritise social spending and protect the incomes of the weakest. The accommodative fiscal stance is appropriate, but in the medium term fiscal policy needs to adjust to permanently lower oil prices. Returning to a fiscal rule limiting the use of oil revenues could facilitate this adjustment. The current tight stance of monetary policy seems appropriate, but easing should proceed with reductions in inflation expectations. Bank balance sheets should be monitored closely, as non-performing loans have been on the rise.

Measures to combat corruption, strengthen the rule of law, reduce state control, and reinforce skills and innovation would raise productivity. While red tape has been reduced recently, more progress is needed at the regional level. In the medium term, making the economy less dependent on rents from natural resource extraction will be the key to stronger and more stable income growth

Le Luxembourg et le pays

Existing conventions and Agreements

Non double taxation agreement

In order to promote international economic and financial relations in the interest of the Grand Duchy of Luxembourg, the Luxembourg government negotiates bilateral agreements for the avoidance of double taxation and prevent fiscal evasion with respect to Taxes on Income and on fortune with third countries.

Convention from, 28.6.1993(Memorial 1995, A, p. 1688 )

Effective as of 07.05.1997 (Memorial 1997, A, p. 1444)

Convention from 04.07.13 (Memorial 2013, A, p. 1715)

Effective as of 01.01.14

Air Services agreement

Plus d'informations

Foreign Trade

The Statec Foreign Trade statistics provide information on the trade of goods - by product and by country. This information is collected respectively through the INTRASTAT declaration and on the basis of customs documents.

Ducroire is the only credit insurer covering open account deals in over 200 countries. A rating on a scale from 1 to 7 shows the intensity of the political risk. Category 1 comprises countries with the lowest political risk and category 7 countries with the highest. Macroeconomics experts also assess the repayment climate for all buyers in a country.

Other Useful Links:

Luxembourg for Business market entry guide to Russia: Market entry guides are brochure series published by the Ministry of the Economy and Foreign. The series focuses on worldwide markets, industries and business environments, providing comprehensive and in-depth analysis and guidelines. The brochures cover all aspects relating to a market entry including the economic, financial and legal frameworks. The brochures are a vast knowledge pool, compiled into a practice oriented document with many tips and important addresses.